There are a lot of problems with big-ticket settlements like the one the DoJ recently enetered into with Bank of America. First and foremost, they punish the wrong people; namely, BoA's shareholders. BoA shareholders did not make the decisions for which the government prosecuted BoA, but the fine comes out of the company's bottom line and thus out of the shareholders' return. It's unfair and plain bad policy, for reasons we have frequently discussed on this blog before.
But another key problem is that liberal prosecutors frequently divert substantial parts of such settlements to left-wing activist groups. Eliot Spitzer was notorious for doing so (when he wasn't screwing escorts) back when GuvLuv was NY attorney general:
[T]o a host of Empire State charities and well-connected law-school deans, the crusading New York attorney general is acting a lot ... like Santa Claus.
We apparently can add Eric Holder to the list of liberal Santa Clauses:
Radical Democrat activist groups stand to collect millions from Attorney General Eric Holder's record $17 billion deal to settle alleged mortgage abuse charges against Bank of America.
Buried in the fine print of the deal, which includes $7 billion in soft-dollar consumer relief, are a raft of political payoffs to Obama constituency groups. In effect, the government has ordered the nation's largest bank to create a massive slush fund for Democrat special interests. ...
The more we learn about this settlement, the more it stinks.